U.S. stock futures declined on Thursday, following the Nasdaq Composite’s milestone of closing above the 20,000 mark for the first time. The S&P 500 saw a gain of 0.8%, while the Dow Jones Industrial Average lagged, dropping by approximately 99 points, or 0.2%. Hackett noted that current market expectations are high, with valuations at their peak since the tech bubble. Despite supportive seasonal and technical factors through year-end, investors are expected to be more selective next year, carefully weighing risks and rewards. On the economic front, the producer price index report for November anticipated to show a 0.2% monthly increase, and weekly jobless claims are set to be released on Thursday morning.

European markets experienced a slight dip on Thursday morning as investors awaited the European Central Bank’s (ECB) final monetary policy decision of the year. The Stoxx Europe 600 index edged down by less than 0.1%, while the euro saw a notable increase of 0.7% against the Swiss franc following an unexpected 50-basis-point rate cut by the Swiss National Bank. Analysts surveyed by Bloomberg anticipate that the ECB will reduce its policy rate by 25 basis points for the fourth time this year. Additionally, the ECB is expected to release its quarterly macroeconomic projections, providing insights into future growth and inflation trends.

Asia-Pacific markets mostly saw gains on Wednesday, buoyed by positive momentum from Wall Street. Investors in the region reacted to Australia’s latest jobs data, which revealed an 8-month low unemployment rate of 3.9% for November. Despite this, Australia’s S&P/ASX 200 dipped by 0.28%. In Japan, the Nikkei 225 and Topix indices rose by 1.21% and 0.86%, respectively. South Korea’s President Yoon Suk Yeol, addressing public pressure, stated he would not resign, coinciding with a 1.62% rise in the Kospi index and a 1.1% increase in the Kosdaq. Meanwhile, China’s CSI 300 climbed 0.99%, and Hong Kong’s Hang Seng index advanced by 1.28%.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include CEIN. After the bell reports include AVGO, COST, & RH.

News & Technicals’

President Joe Biden announced the commutation of sentences for nearly 1,500 offenders and the pardoning of 39 others, marking the largest number of clemencies granted in a single day, according to the White House. In a statement, Biden emphasized America’s foundation on the promise of possibility and second chances. The White House noted that Biden has issued more sentence commutations at this point in his presidency than any recent predecessors in their first terms. Biden hinted at further actions, stating that his administration would continue to review clemency petitions and take additional steps in the coming weeks.

Oil prices edged higher for the fourth consecutive day amid potential tighter restrictions on Russian and Iranian oil flows. Brent crude hovered around $74 per barrel, having climbed over 3% in the past three sessions. U.S. Treasury Secretary Janet Yellen suggested that low oil prices might enable further sanctions on Russia, while Donald Trump’s national security adviser nominee indicated a strategy of maximum pressure on Iran. Despite these developments, the International Energy Agency (IEA) warned of a potential oil supply glut next year, contrasting with the U.S. Energy Information Administration’s (EIA) forecast of balanced markets. This comes even as OPEC+ has decided to postpone increasing output.

China reaffirmed its recent policy adjustments and emphasized plans to stimulate growth during a high-level economic planning meeting that concluded on Thursday, as reported by state media. Using language reminiscent of the 2008 global financial crisis, Beijing highlighted an increased urgency to bolster its struggling economy and brace for a potential trade war with the U.S., with Donald Trump returning to the White House. Since late September, Chinese officials have intensified stimulus efforts, but recent economic data shows these measures have not been enough to counter ongoing deflationary pressures. This has raised investor expectations that Beijing will further enhance its stimulus initiatives to revive growth. Notably, the country’s consumer price inflation dropped to a five-month low in November.

Adobe’s stock dropped by 8% following the release of its revenue estimates for the fiscal first quarter, which fell short of expectations. The company projected revenues between $5.63 billion and $5.68 billion, below the consensus estimate of $5.73 billion as reported by LSEG. Despite this, Adobe’s adjusted earnings per share and revenue for the previous quarter exceeded analysts’ forecasts, highlighting a mixed financial outlook for the company.

The market chose to celebrate the rising inflation in the CPI with Nasdaq Composite’s Milestone of 20,000 as big tech surged higher.  Keep in mind that today we have more inflation data with the PPI report as well as jobless claims.  Plan your risk carefully.

Trade Wisely,

Doug

Stock futures remained nearly flat on Wednesday with investors waiting the release of new U.S. inflation data. Traders are particularly focused on November’s consumer price index (CPI) reading, expected in the morning. According to economists polled by Dow Jones, the CPI, which measures a basket of goods and services, is anticipated to rise by 0.3% from October and 2.7% year-over-year. Excluding the more volatile food and energy prices, the core CPI is projected to increase by 0.3% month-over-month and 3.3% from the previous year. This data precedes the producer price index report, due on Thursday morning, and both reports are among the last significant economic indicators before the Federal Reserve’s policy meeting next week.

European markets experienced mixed results on Wednesday as traders processed disappointing corporate updates and anticipated the latest U.S. inflation data. Shares of Inditex, the Spanish clothing giant and owner of Zara, dropped by 6% following the release of its interim nine-month and quarterly results. German online retailer Zalando saw a significant decline, falling as much as 10% after announcing its agreement to acquire the fashion group About You. Meanwhile, the U.K. and the European Union are proactively strengthening their cooperation to prepare for potential trade and defense challenges with the incoming U.S. administration. A senior EU diplomat mentioned that the bloc could benefit from closer ties with the U.K. due to Britain’s historical “special relationship” with the United States.

Asia-Pacific markets showed mixed performance on Wednesday as investors reacted to various regional developments. China commenced its annual economic work conference, setting the stage for next year’s economic policies and growth targets. In response, Hong Kong’s Hang Seng index reversed earlier gains, closing 0.76% lower, while China’s CSI 300 index dipped by 0.17%. Conversely, South Korea’s blue-chip Kospi index surged by 1.02%, reflecting investor optimism. Japan’s markets saw modest gains, with the Nikkei 225 rising slightly and the Topix increasing by 0.29%. Meanwhile, Australia’s S&P/ASX 200 index fell by 0.47%, ending the day at 8,353.6.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include CGNT, PLAB, & REVG. After the bell reports include ADBE, NDSN, & OXM.

News & Technicals’

Federal Reserve Chair Jerome Powell is expected to complete his term leading the U.S. central bank, despite earlier suggestions that he might be pressured to resign. This assurance came from Scott Bessent, a prominent hedge fund manager and President-elect Donald Trump’s nominee for Treasury secretary. Bessent confirmed his support for Powell during a conversation with CNBC following a meeting with Senator Mike Crapo of Idaho, stating, “As the President said on Sunday, and I’m in complete agreement with him, that Jay Powell will serve out his term.”

U.S. Treasury yields remained relatively stable on Wednesday as investors awaited the release of November’s consumer price index (CPI) data. By 5:50 a.m. ET, the 10-year Treasury yield had edged up to 4.236%, increasing by more than 1 basis point, while the 2-year Treasury yield also rose by 1 basis point to 4.166%. According to a Dow Jones survey of economists, the CPI is expected to rise by 0.3% from October and 2.7% year-over-year. These inflation figures are among the final significant economic data points before the Federal Reserve’s monetary policy meeting next week, where the central bank will announce its next interest rate decision and provide guidance on future policy and economic outlook on December 18.

Alphabet’s shares saw an uptick on Tuesday following the unveiling of “Willow,” the company’s latest quantum computing chip. While the full potential of quantum computing, such as large-scale simulations and code breaking, may not be realized for years or even decades, the announcement generated significant excitement. Prominent technology leaders, including Tesla CEO Elon Musk and OpenAI CEO Sam Altman, praised the development on social media, highlighting the industry’s anticipation for future advancements in quantum technology.

Major insurance stocks have declined by over 6% since their closing prices last Tuesday, following the tragic shooting of Brian Thompson, CEO of UnitedHealth Group’s insurance division. This drop includes shares of UnitedHealth Group, CVS Health, and Cigna, which are among the largest private health insurers in the U.S. According to Jared Holz, Mizuho’s health-care equity strategist, this stock performance seems to be influenced by renewed negative rhetoric surrounding insurers and their business practices.

As we wait for the new U.S. Inlfation data anything is possible. Keep in mind that tomorrows PPI report could be also be market-moving so plan your risk carefully!

Trade Wisely,

Doug

Tuesday morning, stock futures hover near the flatline following a pullback in the S&P 500 and Nasdaq Composite from their record highs. Nvidia shares declined after a Chinese regulator announced an investigation into the chip giant for potential antimonopoly law violations. Investors are also awaiting the National Federation of Independent Business’s small business survey, set to be released Tuesday morning. The key event this week is the U.S. consumer price index report, due on Wednesday, which could significantly impact the Federal Reserve’s decisions on interest rates at their upcoming meeting on December 17-18.

On Tuesday, European markets traded in negative territory, pulling back from the previous day’s mostly positive session. This retreat came as investors prepared for the upcoming U.S. inflation report. Basic resources stocks were the hardest hit, losing around 1% due to disappointing Chinese import and export figures. As a result, traders are now keenly anticipating the U.S. inflation data set to be released on Wednesday.

China stocks showed mixed performance amid overall gains in Asia-Pacific markets. Investor sentiment was buoyed by Beijing’s announcement of “more proactive” fiscal measures and “moderately” looser monetary policy for the upcoming year, aimed at boosting domestic consumption. The CSI 300 index in China rose by 0.74%, reflecting positive market reactions. However, Hong Kong’s market dipped slightly by 0.2%. In contrast, South Korea’s market saw significant gains, with the Kospi rising 2.43% and the small-cap Kosdaq surging by an impressive 5.52%. Meanwhile, Australia’s S&P/ASX 200 fell by 0.36%, and Japan’s Nikkei 225 increased by 0.53%.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include ASO, AZO, DBI, FERG, GIII, OLLI, & UNFI. After the bell reports include PLAY, GME, & STFX

News & Technicals’

China is expected to raise its budget deficit to the highest level in three decades and implement the deepest interest-rate cuts since 2015, following strong stimulus signals from its top leaders. Economists predict that next year’s fiscal deficit target could reach 4% of GDP, the widest since a significant tax reform in 1994. Historically, Beijing has maintained its budget deficit ratio at or below 3%. A larger fiscal deficit indicates that the government will increase borrowing to fund higher public expenditure, potentially boosting domestic demand as companies and households cut back on spending and investment.

Prosecutors in New York have charged Luigi Mangione, an Ivy League graduate, with the murder of UnitedHealthcare CEO Brian Thompson, according to court records. This charge was filed just hours after Mangione was arraigned in a Pennsylvania courtroom on gun and other charges following his arrest earlier Monday at a McDonald’s in Altoona, Pennsylvania. Mangione is accused of fatally shooting Thompson as the CEO was heading into an investor meeting for UnitedHealth Group, the parent company of his health insurance giant.

Oracle shares dropped by 7% in extended trading on Monday after the company reported fiscal second-quarter results that missed analysts’ expectations and provided a weaker-than-anticipated forecast. Despite this, Oracle announced a new agreement with Meta, enabling the social media giant to utilize its infrastructure for projects related to the Llama family of large language models. Even with the recent decline, Oracle’s stock has surged over 80% this year, on track for its best annual performance since 1999.

Tesla is facing a lawsuit from the family of Genesis Giovanni Mendoza-Martinez, who died in a 2023 collision involving a Model S sedan in Walnut Creek, California. The lawsuit claims that Tesla’s “fraudulent misrepresentation” of its Autopilot technology contributed to the crash. Mendoza-Martinez’s brother, Caleb, who was a passenger, sustained serious injuries. The family’s attorneys allege that Tesla and its CEO, Elon Musk, have exaggerated or made false claims about the Autopilot system for years to generate excitement about the company’s vehicles and improve its financial condition.

Trade Wisely,

Doug

U.S. stock futures edged lower on Monday following a strong performance by the S&P 500 and Nasdaq Composite, produced three winning weeks in a row. This cautious start to the week comes ahead of key inflation data set to be released, which will provide crucial insight into the Federal Reserve’s upcoming policy decisions. The November jobs report, which showed stronger-than-expected growth, has already influenced market sentiment. With the Fed in a blackout period before its policy-setting meeting, investors are keenly awaiting the November consumer price index (CPI) data due on Wednesday. Economists surveyed by Dow Jones anticipate a slight increase in pricing pressures, with expected monthly and yearly rises of 0.3% and 2.7%, respectively, up from the previous month’s 0.2% and 2.6%.

European markets opened the week with mixed results as investors navigated ongoing geopolitical turmoil. Major regional bourses pared back most of their earlier gains, though European luxury stocks saw a boost, with Gucci-owner Kering rising as much as 4% at one point. The market’s attention was also focused on the Middle East, where the recent ousting of Syrian President Bashar al-Assad by rebel forces has created uncertainty. Western leaders have responded cautiously to the overthrow, concerned about the potential for a power vacuum and increased instability in the region.

China’s recent announcement of “more proactive” fiscal measures and “moderately” looser monetary policy aimed at boosting domestic consumption had mixed effects on regional markets. Before the news, mainland China’s CSI 300 index saw a slight decline of 0.17%, while Hong Kong’s Hang Seng index surged nearly 3%. In South Korea, political turmoil following President Yoon Suk Yeol’s survival of an impeachment vote and the aftermath of his brief martial law declaration led to significant market drops. The Kospi index fell by 2.78%, and the small-cap Kosdaq plummeted 5.19% to 627.01 as investors remained cautious. Meanwhile, Japan’s Nikkei 225 experienced a modest increase of 0.18%, and Australia’s S&P/ASX 200 ended the day with marginal gains.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include MOMO. After the bell reports include BRZE, AI, CASY, MDB, ORCL, PHR, MTN, TOL, YEXT.

News & Technicals’

Since Donald Trump became president-elect, nearly $10 billion has flowed into U.S. exchange-traded funds (ETFs) that invest directly in Bitcoin. This surge, totaling about $9.9 billion in net inflows, reflects investor optimism that Trump’s favorable stance on the crypto sector will drive market growth. Major issuers like BlackRock Inc. and Fidelity Investments have been key beneficiaries of this trend. Additionally, Trump’s recent appointments of a digital-asset supporter as the head of the U.S. securities regulator and the first-ever White House czar for artificial intelligence and crypto have further fueled expectations of a booming crypto market.

On Monday, the 10-year U.S. Treasury yield inched up by approximately 1 basis point to 4.17%, as investors evaluated the potential impact of recent jobs data on the Federal Reserve’s upcoming interest rate decision. Similarly, the 2-year Treasury yield rose by 1 basis point to 4.11%. This slight increase comes after a dip last week. Investors are now turning their attention to key economic indicators due later this week, including fresh inflation data on Wednesday and the latest producer price index on Thursday. Additionally, business confidence and mortgage data releases are expected, although no major data points are scheduled for Monday.

President-elect Donald Trump has stated that he does not intend to replace Federal Reserve Chair Jerome Powell, whose term extends until May 2026. In an interview at Trump Tower, Trump responded to a question about Powell’s potential replacement by saying, “No, I don’t think so. I don’t see it.” He added that while Powell might comply if directly told to step down, he would likely resist if merely asked. This exchange highlights the ongoing dialogue about the Federal Reserve’s leadership as Trump prepares to take office.

Over the weekend, significant political upheavals occurred globally: Syria’s President Bashar Al-Assad reportedly fled to Russia, ending 50 years of Assad family rule; South Korea’s president survived an impeachment vote after declaring martial law for the first time in over 40 years; and France’s government collapsed following a no-confidence vote, a first in over 60 years. These events could cast a shadow over the typical year-end market rally, which usually sees markets climb. The full impact of these political developments remains uncertain, contributing to market volatility. However, positive U.S. economic data supports the case for a market rise. Traders are optimistic that the U.S. Federal Reserve will act as the market’s “Santa Claus” this year, with an 85% chance of a 25 basis points rate cut next week, according to the CME FedWatch tool, which is likely to boost markets.

Trade Wisely,

Doug

This morning, US equity futures experienced fluctuations as investors took a breather from a record-breaking rally. Despite this pause, Bitcoin surged past $100,000 following President-elect Donald Trump’s appointment of a crypto advocate as the next head of the Securities and Exchange Commission. The S&P 500 marked its 56th record close of 2024, with the Dow and QQQ also reaching new highs, largely driven by gains in big tech. Federal Reserve Chairman Jerome Powell noted that the risks from the labor market had diminished, allowing Fed officials to cautiously lower interest rates toward a neutral level that neither stimulates nor restrains economic growth.

European stocks saw an uptick, particularly in France, following the ousting of Prime Minister Michel Barnier’s government in a no-confidence vote the previous day. The market’s positive movement was driven by gains in travel and banking stocks, although industrials and health care sectors experienced minor losses. In a significant development, Shell and Norway’s Equinor announced their intention to merge their British offshore oil and gas assets, forming a new energy company based in Aberdeen, Scotland. This merger is poised to make the new entity the largest independent producer in the U.K. North Sea.

Asia-Pacific markets showed mixed performance amid significant political upheaval. In South Korea, lawmakers moved to impeach President Yoon Suk Yeol just a day after he declared martial law, with a vote scheduled for Saturday evening, according to local reports. This political instability contributed to a 0.90% drop in the Kospi and a 0.92% decline in the Kosdaq. Meanwhile, Australia’s S&P/ASX 200 saw a modest gain of 0.1%, Japan’s Nikkei 225 rose by 0.30%, but Hong Kong’s Hang Seng index fell by 1.1%.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include CRMT, BMO, BF>B, CAL, CM, DG, GMS, SIG, & TD, After the bell reports include AGX, ASAN, COO, DOCU, COMO, GTLB, GWRE, HCP, HPE, LULU, WOOF, RBBK, IWT, SMAR, SWBI, PATH, ULTA, VEEV, VSCO, & ZIMZ.

News & Technicals’

Wednesday night, Bitcoin’s price surged past the highly anticipated $100,000 mark for the first time ever. This milestone followed new closing records for the S&P 500 and Nasdaq Composite, coinciding with President-elect Trump’s announcement of his SEC chair pick and Fed Chair Jerome Powell’s comparison of Bitcoin to gold. Bitcoin has now risen over 140% in 2024 and 48% since the election. Mike Novogratz, CEO of Galaxy Digital, remarked to CNBC that the digital asset ecosystem is on the verge of becoming a mainstream financial force.

American Eagle has revised its full-year sales forecast downward and provided holiday guidance that fell short of expectations. While the retailer experienced robust demand during the back-to-school season, it noted a slowdown in consumer spending between key shopping periods. Despite this, the Aerie brand continued to perform well, with comparable sales increasing by 5%, building on a 12% rise from the previous year.

Shell and Equinor are set to establish a joint venture in Aberdeen, Scotland, aiming to sustain fossil fuel production and ensure energy security in the U.K. The deal, expected to be finalized by the end of next year pending approvals, will create the U.K. North Sea’s largest independent producer. This strategic move underscores the companies’ commitment to maintaining a stable energy supply while navigating the evolving energy landscape.

Vivek Ramaswamy, co-leading President-elect Trump’s new Department of Government Efficiency alongside Elon Musk, announced that any “last minute spending spree” under Biden’s Inflation Reduction Act (IRA) or CHIPS Act will be closely scrutinized. He specifically mentioned the recent $6.6 billion loan to electric vehicle maker Rivian Automotive. Ramaswamy emphasized that any significant increase in spending and “dollars out the door” during the final days of Biden’s term could be considered “indefensible” and potentially a “fiduciary breach.”

After yesterday’s record-breaking rally futures hint at a possible rest as the bulls catch their breath.  However, the index charts all indicate bullish patterns with no signs that the bears gaining ground.  That said, the decline in the T2122, T2108, T2107 indicators as the market extends is suggesting a substantial divergence is developing. Should the bears find a reason to attack the divergence could result in a swift and substantial pullback so have a plan in pace to protect capital and profits if those profit-takers find reason to run for the door.

Trade Wisely,

Doug

Tech stocks spearhead a rise in US equity futures as traders anticipated comments from Federal Reserve Chair Jerome Powell for insights into future interest rate movements. The Nasdaq 100 index contracts saw a 0.7% increase, driven by favorable earnings reports within the tech sector. Meanwhile, S&P 500 contracts also moved up, following the benchmark’s achievement of its 55th record high for the year on Tuesday. Additionally, the dollar gained strength, and 10-year Treasury yields rose, reflecting broader market dynamics.

European stocks were on the rise early Wednesday as investors prepared for a no-confidence vote in France’s National Assembly. The French CAC 40 index increased by 0.4% in morning trading, reflecting cautious optimism amid a politically turbulent week in France. The autos sector led the gains, climbing 1.2% following a report from Italian newspaper Corriere della Sera that Stellantis is considering outgoing Apple CFO Luca Maestri for its CEO position. Conversely, stocks in the healthcare, food and beverage, and basic resources sectors were trading lower.

South Korean markets experienced a significant downturn on Wednesday as political pressure intensified on President Yoon Suk Yeol following his brief imposition and subsequent lifting of a martial law decree. Concerns over financial instability prompted the Bank of Korea to announce plans to enhance short-term liquidity and implement measures to stabilize the foreign exchange market as needed. The Kospi index declined by 1.44%, and the Kosdaq fell by 1.98%. In contrast, Japan’s Nikkei 225 remained nearly flat, while Mainland China’s CSI 300 and Australia’s S&P/ASX 200 saw modest declines of 0.54% and 0.38%, respectively.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include CPB, CHWY, DLTR, FL, HRL, RY, & THO. After the bell reports include AVAV, AEO, CHPT, DSGX, FIVE, GEF, NCNO, PVH, S, CXM, SNPS, & VRNT.

News & Technicals’

Attention Wednesday will be focused on Powell’s upcoming speech and the latest US data on services and manufacturing as the market anticipates Friday’s crucial labor market update. Fed Bank of San Francisco President Mary Daly mentioned that while a December rate reduction isn’t guaranteed, it remains a possibility. Guy Miller, chief strategist at Zurich Insurance, noted that the Fed has been clear in its signaling so far, suggesting that if a pause is considered, Powell might hint at it to avoid surprising the market. This comes amid a significant surge in US stocks, with the S&P 500 index climbing 27% this year.

French markets remained relatively stable ahead of Wednesday’s no-confidence vote, which poses a threat to the current government. The CAC 40 index saw a slight rise, marginally outperforming the broader European Stoxx 600 index. Meanwhile, the yield premium on French bonds compared to their German counterparts held steady, and the euro experienced a slight weakening. This stability in the markets was anticipated by Nannette Hechler-Fayd’herbe, EMEA chief investment officer at Lombard Odier.

Investors in South Korea are closely evaluating the future political landscape after the opposition Democratic Party announced plans to pursue treason and impeachment charges against President Yoon for his illegal declaration of martial law. In response to the potential instability, the Bank of Korea has committed to boosting short-term liquidity and taking proactive measures in the currency markets to maintain stability. Charu Chanana, chief investment strategist at Saxo Markets, noted that while some uncertainty remains, the swift actions by Korean authorities could help limit the regional impact.

U.S. airline executives are preparing to defend their seating fees before a Senate panel on Wednesday, following accusations from the subcommittee that the industry has been generating billions in revenue through “junk” fees. The Biden administration, along with some lawmakers, has vowed to address these fees, specifically targeting the airline industry for reductions. According to a report released on November 26 by the Senate Permanent Subcommittee on Investigations, American, Delta, United, Spirit, and Frontier airlines collectively amassed $12.4 billion in seating fees from 2018 to 2023.

The bulls are running hard this morning but keep in mind Jerome Powell speaks this afternoon, and anything is possible.  Bank of America published a report to their customers to exercise caution as you head toward the Friday jobs report suggesting the market may be getting ahead of itself considering the pending government shutdown on the 20^th and big shakeup expected as the new administration takes control.  Of course, stay with the trend but watchful for a change as the market continues to wildly extend.

Trade Wisely,

Doug

Early Tuesday, stock futures showed little movement following the S&P 500’s record, closing high on the first trading session of the month. Investors are eagerly awaiting the October job opening report, which is the first of several key data releases this week that will shed light on the labor market’s strength. The highlight of the week will be the November payrolls report, set to be released on Friday. Additionally, traders are keeping an eye on speeches from Fed Governor Adriana Kugler and Chicago Fed President Austan Goolsbee, scheduled for Tuesday afternoon, for further insights into economic conditions.

European markets traded higher despite the political turmoil in France. Investors are closely monitoring the situation as Prime Minister Michel Barnier invoked special constitutional powers to pass a controversial budget bill without a parliamentary vote. This move has sparked significant backlash, with opposition parties from both the left and right uniting to support a no-confidence vote aimed at toppling Barnier’s minority government. The outcome of this vote, which could occur as soon as Wednesday, is being eagerly anticipated by market participants.

Asia-Pacific markets experienced a notable rise. Japan’s Nikkei 225 surged by 2.22%, while the Topix increased by 1.71%. South Korea’s Kospi and Kosdaq both saw significant gains, rising by 1.71% and 2.03% respectively. Hong Kong’s Hang Seng Index climbed 0.65%, and mainland China’s CSI 300 edged up by 0.11%. Australia’s S&P/ASX 200 also saw a positive movement, increasing by 0.56%. Meanwhile, South Korea’s inflation rate for November rose to 1.5% year-on-year, up from October’s 1.3%. This overall positive trend in the markets reflects a strong performance across the region.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include BNS, CNM, & DCI. After the bell reports include BOX, BASE, CRM, MRVL, MITK, OKTA, & CURV.

News & Technicals’

Traders pushed the yuan to a one-year low, defying China’s attempts to support the currency. This decline reflects bets that policymakers will need to continue easing monetary policy to stimulate the economy. The yuan’s drop was exacerbated by record lows in the nation’s 10-year bond yields, driven by concerns that economic conditions will deteriorate further with the anticipated higher tariffs once Donald Trump assumes the U.S. presidency. Despite Beijing’s efforts to strengthen the yuan with a stronger-than-expected daily reference rate, the currency continued to fall.

The Department of Commerce has imposed new restrictions on the sale of high-bandwidth memory chips produced by both U.S. and foreign companies, impacting major players like South Korea’s SK Hynix Inc. and Samsung Electronics Co., as well as Idaho-based Micron Technology Inc. These chips are crucial for data storage and AI applications. Additionally, the agency has broadened existing controls on chipmaking equipment, including products made by U.S. firms at overseas facilities, while providing exceptions for key allies such as Japan and the Netherlands. In response, China’s Ministry of Commerce stated on Monday that it will take necessary measures to firmly protect its rights and interests.

The Department of Commerce has imposed new restrictions on the sale of high-bandwidth memory chips produced by both U.S. and foreign companies, impacting major players like South Korea’s SK Hynix Inc. and Samsung Electronics Co., as well as Idaho-based Micron Technology Inc. These chips are crucial for data storage and AI applications. Additionally, the agency has broadened existing controls on chipmaking equipment, including products made by U.S. firms at overseas facilities, while providing exceptions for key allies such as Japan and the Netherlands. In response, China’s Ministry of Commerce stated on Monday that it will take necessary measures to firmly protect its rights and interests.

Today, Microsoft faced allegations of unfairly overcharging customers of rival cloud companies in a lawsuit seeking over £1 billion ($1.27 billion) in damages. The lawsuit claims that customers using Amazon Web Services (AWS), Google Cloud Platform, or Alibaba Cloud are compelled to pay higher fees to license Microsoft’s cloud-based Windows Server software on these competitors’ infrastructures. It further asserts that Microsoft exploits its dominant market position in cloud-based server operating systems by imposing higher prices and encouraging customers to switch to its Azure cloud platform.

With the SP 500 record closing high, the bulls continue to show their dominance in the market and willingness to push the big tech giants higher with AI hopes as the driving force.  Stay with the trend but keep in mind with P/E ratios strongly overvalued, a profit-taking wave could begin at anytime so have a plan to protect your gains.  Today traders will be looking for inspiration in the JOLTS report and Fed speeches this afternoon.  

Trade Wisely,

Doug

S&P 500 futures dipped slightly on Monday morning as investors prepared for the final month of 2024, hoping for a Santa Claus rally to end the year. This follows a strong performance in both the past week and month, largely driven by a postelection rally after President-elect Donald Trump’s victory. Investors are keenly awaiting Monday’s economic data on manufacturing and construction spending, which will set the tone for the week. Additionally, a series of important labor data releases are expected later in the week. Market participants will also be paying close attention to speeches from Federal Reserve Governor Christopher Waller and New York Fed President John Williams for further insights into the economic outlook.

European markets opened higher on Monday as investors kept a close watch on the global economic and interest rate outlooks, heading into the final trading month of the year. Shares of Stellantis, the maker of Jeep, dropped by 8% following the unexpected resignation of CEO Carlos Tavares over the weekend. Meanwhile, recent data indicated a decline in manufacturing sector activity in both the euro zone and the U.K., although the unemployment rate in the European Union remained stable in October. Additionally, markets are on edge due to the latest tariff threats from U.S. President-elect Donald Trump, raising concerns about a potential escalation in trade tensions in 2025.

Asia-Pacific markets saw a positive start to the week on Monday, with most indices trading higher as investors turned their attention to a series of economic reports from key countries in the region, including Japan, South Korea, and China. Over the weekend, China reported its November Manufacturing PMI at 50.3, indicating slight expansion in the sector. Australia’s S&P/ASX 200 edged up by 0.14%, while South Korea’s Kospi rose by 0.35%. Japan’s Nikkei 225 experienced a notable increase of 0.8%, and Hong Kong’s Hang Seng index gained 0.65%. This data-heavy week has investors closely monitoring these economic indicators for further market direction.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include CRDO & ZS. After the bell reports include BNS, CNM, & DCI.

News & Technicals’

Joe Biden pardoned his son Hunter Sunday night, a reversal for the president, who repeatedly said he would not use his executive authority to pardon his son or commute his sentence. The president issued a “full and unconditional pardon” for any offenses Hunter Biden has “committed or may have committed or taken part in during the period from January 1, 2014, through December 1, 2024,” according to the White House statement. Hunter Biden was scheduled to be sentenced on Dec. 12 for his conviction on federal gun charges. He also was set to be sentenced on Dec. 16 in a separate criminal case in which he pleaded guilty to federal tax evasion charges in September.

Volkswagen plants across Germany experienced significant disruptions on Monday as workers staged strikes for several hours at a time. The strikes affected nine of Volkswagen’s car and component factories, leading to temporary halts in production and shortened shifts. These warning strikes highlight escalating tensions between the company and its workforce over proposed changes to labor agreements and the looming threat of factory closures. The demonstrations underscore the growing unrest among employees as they push back against potential changes that could impact on their job security and working conditions.

Big-box retailers are increasingly adopting smaller-footprint stores as part of their strategy to offer diverse shopping experiences. Ikea is the latest to join this trend, following in the footsteps of Target, Macy’s, and Nordstrom, which have all introduced smaller locations in recent years. Walmart pioneered this concept over a decade ago with its Express stores, and the last remaining Kmart in the U.S. also operates as a smaller format store. Data indicates that these compact stores can attract a more affluent demographic, although the shift is often driven by specific location needs and targeted expansion strategies. This approach allows retailers to adapt to changing consumer preferences and urban space constraints while maintaining a strong market presence.

Stellantis CEO Carlos Tavares unexpectedly resigned from the automaker, citing increasingly divergent views between himself and the board of directors. According to Henri de Castries, Stellantis’ senior independent director, the company’s success has historically been due to strong alignment among shareholders, the board, and the CEO. However, recent differences led to the decision for Tavares to step down. Following the announcement, U.S.-traded shares of Stellantis dropped approximately 8% in premarket trading on Monday. Prior to this, the stock had already declined by about 43% in 2024, reflecting broader challenges faced by the company.

Though many are hopeful for a Santa Claus rally remember volumes could be light with the distraction on Cyber Monday sales and the many folks extending their vacation time with family. Jobs data with be the theme of the week culminating in the Employment Situation report on Friday morning.  We also have a busy week of Fed speeches with the Jerome Powell himself on Wednesday.

Trade Wisely,

Doug

Futures tied to the Nasdaq-100 declined as investors scrutinized Nvidia’s earnings report. Despite Nvidia surpassing third-quarter expectations and providing robust guidance, its shares dropped 3% in premarket trading. This reaction highlights the heightened expectations surrounding Nvidia, as noted by Aswath Damodaran, a finance professor at New York University’s Stern School of Business. He remarked on CNBC’s “Closing Bell: Overtime” that Nvidia not only needs to exceed analyst estimates but must do so by a significant margin, around 10%, to satisfy market anticipations.

European stocks flattened out due to weak global market sentiment. British sports retailer JD Sports saw its shares plummet over 14% in early trading after cautioning that its annual profits would likely hit the lower end of its forecast. Conversely, Zurich Insurance shares climbed 2% following the announcement of a new three-year plan. The overall market sentiment was further dampened by investor reactions to the crucial earnings report from artificial intelligence leader Nvidia.

Asia-Pacific markets experienced a downturn as investors closely monitored tech shares and developments surrounding Indian stocks linked to billionaire Gautam Adani. The chair of Adani Group, along with others, faced an indictment in a New York federal court over a significant bribery and fraud scheme. This news contributed to a decline in several key indices: India’s Nifty 50 dropped by 0.72%, Japan’s Nikkei 225 fell by 0.85%, and Hong Kong’s Hang Seng index decreased by 0.32%. In contrast, mainland China’s CSI300 saw a slight gain of 0.09%. Meanwhile, markets in South Korea and Australia ended the day marginally lower.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include AKTR, BJ, BEKE, DE, SCVL, VSTS, & WMG. After the bell reports include CPRT, ESTC, GAP, INTU, ROST, & UGI.

News & Technicals’

Ukraine reported that Russia launched an intercontinental ballistic missile (ICBM) overnight, targeting Dnipro city in the central east of the country. If confirmed, this would mark the first use of such a missile by Moscow in the ongoing conflict. Although the range of an ICBM seems excessive for a strike against Ukraine, these missiles are typically designed to carry nuclear warheads. The deployment of an ICBM would underscore Russia’s nuclear capabilities and signal a potential escalation in the conflict. The attack resulted in injuries to two individuals and caused damage to an industrial facility and a rehabilitation center for people with disabilities, according to local officials.

Gautam Adani, one of the world’s wealthiest individuals, was indicted in a New York federal court on charges related to an alleged bribery and fraud scheme. A spokesperson for Adani Group dismissed the allegations from the U.S. Department of Justice and the U.S. Securities and Exchange Commission against directors of Adani Green Energy as “baseless and denied.” Following the indictment, shares of companies within India’s Adani Group plummeted, with Adani Green Energy — the company at the heart of the allegations — experiencing a significant drop of 17.9%.

Chinese tech giant Baidu reported a 3% year-over-year decline in third-quarter revenue, totaling $4.78 billion for the quarter ending September 30. Despite this drop, the company exceeded market expectations, driven by growth in its AI cloud segment. Net income for the period increased by 14%, reaching $1.09 billion. However, Baidu’s U.S.-traded shares fell nearly 4% in premarket trading following the release of these results.

The Department of Justice is urging a federal judge to mandate that Google divest its Chrome internet browser as a remedy in the ongoing antitrust case. According to the filing, this action is intended to “permanently stop Google’s control of this critical search access point.” This push follows an August ruling by a U.S. judge that determined Google holds a monopoly in the search market. The proposed divestiture of Chrome aims to address and mitigate the competitive harms identified in the case.

Although NVDA was down during the night the US futures this morning have decided it was good enough to push for a gap up open.  Keep in mind the rest of the world seems to have a slightly different opinion.  Today we will look for clues to inspire the bulls or the bears in earnings and economic data while keeping an eye on the rising geopolitical tensions.  The bond yields continue to a concern as well the oil prices rising sharply today due to the escalating conflict.

Trade Wisely,

Doug

Stock futures edged higher on Wednesday as investors anticipated a crucial earnings report from tech giant Nvidia, which is set to release its results after the market close. Market participants are particularly interested in the demand for Nvidia’s Blackwell AI chips. Given Nvidia’s substantial market capitalization of $3.6 trillion, its performance could significantly influence the S&P 500 and Nasdaq Composite for the remainder of the week. Additionally, retailers Target and TJX are scheduled to report their earnings on Wednesday morning. Investors will also be paying close attention to remarks from Federal Reserve Governors Lisa Cook and Michelle Bowman, along with Boston Fed President Susan Collins.

European markets opened on a positive note early Wednesday, with the pan-European Stoxx 600 rising by 0.5% in early trading. Most sectors were in the green, except for the automotive sector. The FTSE 100 started flat but gained 0.2% following the release of data showing U.K. inflation surged to 2.3% in October, surpassing expectations. On the Stoxx 600, Sage Group emerged as the top performer, with its shares soaring nearly 17%, while national lottery operator La Française des Jeux (FDJ) was the worst performer, dropping by 5%.

Asia-Pacific markets experienced mixed performance in volatile trading on Wednesday, influenced by escalating geopolitical tensions between Ukraine and Russia. Investors closely analyzed Japan’s October trade data, which showed a year-over-year export growth of 3.1%, a significant improvement from the 1.7% decline in September. Import growth also exceeded expectations at 0.4%, although it was lower than the previous month’s 2.1%. Japan’s Nikkei 225 index dipped by 0.16%, while Hong Kong’s Hang Seng Index edged up by 0.24%. South Korea’s Kospi gained 0.42%, but the Kosdaq fell by 0.47%. Meanwhile, Australia’s S&P/ASX 200 dropped by 0.57%.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include BERY DY, GLBE, NIO, SR, TGT, TJX, & WIX. After the bell reports include CPA, JACK, MMS, NVDA, PANW, SNOW, & SQM.

News & Technicals’

The U.S. closed its embassy in Kyiv on Wednesday, citing specific intelligence about a potential significant air attack amid escalating tensions with Russia. In a statement, the U.S. Embassy announced the closure as a precautionary measure and advised embassy staff to shelter in place. Additionally, the embassy urged U.S. citizens to be ready to take immediate shelter if an air alert is issued.

Comcast is advancing with plans to spin off its cable network channels, according to sources cited by CNBC on Tuesday. The process is anticipated to take about a year, with an official announcement possibly coming as soon as Wednesday. This strategic move aims to provide cable networks with flexibility to merge with other networks or be sold to private equity. The decision comes as millions of customers shift from traditional pay TV bundles to streaming services. Over the next year, Comcast will determine necessary licensing agreements and decide if MSNBC and CNBC will continue their collaboration with NBC News.

U.S. Treasury yields rose on Wednesday as investors weighed the geopolitical tensions and recent economic data. The yield on the 10-year Treasury increased by nearly 5 basis points to 4.426%, while the 2-year Treasury yield climbed by over 2 basis points to 4.297%. The market’s focus was on the escalating conflict between Russia and Ukraine, which has intensified tensions between the U.S. and Russia. In response to the heightened threat, the U.S. closed its embassy in Kyiv, warning of a potential significant air attack.

Target reported disappointing third-quarter earnings and revenue, falling short of analysts’ estimates and prompting the company to lower its full-year guidance. Despite efforts to boost sales by cutting prices on thousands of items, Target struggled to attract customers. This underperformance stands in stark contrast to Walmart, which exceeded Wall Street expectations and raised its outlook just a day earlier.

Despite the dangerous geopolitical situation, the market continues with high anticipation of the crucial earnings from NVDA after the bell today.  Obviously, this report could set the sentiment of the market for the rest of the week so be prepared for a substantial Thursday morning gap. The question is will it be up or down?  Plan your risk carefully and while keeping in mind a significant air strike out of Russia could occur at any time escalating the conflict.

Trade Wisely,

Doug